Earlier this month, Volvo became the latest automaker to announce that it was delaying its plans to sell only electric vehicles<\/a>. The decision was a reflection of the stark reality of the market: the demand was just not there. <\/p>\n<\/div>\n \u201cWe reduced the ambitions we had set to go 100 percent electric by 2030,\u201d Vanessa Butani, head of global sustainability at Volvo, said in an interview. \u201cWe\u2019re pushing that back a bit, not committing fully to a year right now, because we see that even though we\u2019re fully ready to do it, the market\u2019s not really with us.\u201d<\/p>\n<\/div>\n \u201cWe\u2019re pushing that back a bit, not committing fully to a year right now\u201d<\/p>\n<\/div>\n<\/div>\n Several years ago, automakers were tripping over themselves in a rush to declare their intentions to go all in on EVs. Volvo was among the most aggressive, setting the deadline of 2030<\/a> for its switch to an EV-only brand. <\/p>\n<\/div>\n \u201cInstead of investing in a shrinking business, we choose to invest in the future \u2014 electric and online,\u201d then-Volvo CEO H\u00e5kan Samuelsson said in a statement. \u00a0<\/p>\n<\/div>\n That commitment was reinforced as recently as last year, with the brand\u2019s chief commercial officer, Bjorn Annwall, telling Automotive News<\/em><\/a> <\/em>that Volvo would have an all-electric lineup globally by 2030, \u201cno ifs, no buts.\u201d<\/p>\n<\/div>\n Well, Volvo appears to have found a few buts. The company is now saying that it will rely on a mix of hybrids and battery electric vehicles to reach its new goal of selling \u201c90 to 100 percent… electrified models\u201d by 2030. Carbon neutrality for the whole company, including its factory operations and supply chain, will be reached by 2040. Butani calls this \u201cadjusting our ambitions a bit.\u201d <\/p>\n<\/div>\n The adjustment is the result of months of declining customer interest in EVs, leading to slower growth in sales than originally predicted. Just 22 percent of new-vehicle shoppers told JD Power this past month they were \u201cvery likely\u201d to consider an EV for their next new-vehicle purchase, a 4.2 percent drop from a year ago. <\/p>\n<\/div>\n \u201cWe want to go electric,\u201d she said. \u201cWe know that\u2019s the right thing to do, and we need collaboration in our industry and outside of our industry to make sure that that happens.\u201d<\/p>\n<\/div>\n Butani says efforts by governments to promote EVs have been insufficient. \u201cGovernments are taking back incentives,\u201d she said. \u201cInfrastructure isn\u2019t being rolled out fast enough.\u201d<\/p>\n<\/div>\n \u201cWe need collaboration in our industry and outside of our industry to make sure that that happens\u201d<\/p>\n<\/div>\n<\/div>\n While it\u2019s true that EV charging infrastructure improvements have been uneven, customers are reporting that it\u2019s getting better. Another JD Power survey<\/a> last month recorded a 10-point increase year over year in customer satisfaction with public DC fast charging stations. <\/p>\n<\/div>\n And Butani\u2019s complaint about governments revoking incentives calls to mind the adjustments around eligibility for the federal EV tax credit<\/a>. Volvo lost eligibility after the passage of the Inflation Reduction Act in 2022, which mandated that electric vehicles and batteries be manufactured in the US in order to receive the credit. Since then, many manufacturers have said they would build EV battery factories in the US in order to qualify \u2014 but Volvo, which is owned by China\u2019s Geely, has not. <\/p>\n<\/div>\n The company\u2019s Chinese ownership structure is also proving to be its own barrier. Volvo was planning on releasing its compact EX30 SUV<\/a> at the highly attractive starting price of $35,000 in the US this year. But the Biden administration threw a wrench in those plans when it announced its intention of quadrupling tariffs on Chinese-made EVs to 100 percent<\/a>. The EX30, which has been enormously popular in Europe, is built in China, with the initial slate of US-bound units expected to come from the Zhangjiakou factory.<\/p>\n<\/div>\n